The IMF predicts a further fall of the Argentine economy and anticipates a rise in unemployment

The Fund is betting back from the second half of the year to ensure the best harvest and the stabilization program. He has come back to warn of high inflation, even though he expects it to be lower than that predicted by the consultants.

The International Monetary Fund (IMF) estimated that the Argentine economy would fall by 1.2% this year, but it forecast a rebound for the second half due to the better harvest and the impact of the "program" stabilization "- he said – that the country signed with the multilateral organization. However, it projected unemployment to rise by almost one point to 9.9%.

This is clear from the World Economic Report (WEO) released by the international organization on Tuesday before the start of the IMF and World Bank Spring Meeting.

The IMF has improved its economic outlook for the country, which had already progressed on Friday, presenting the scoring report corresponding to the latest revision of the local figures. While he expected a contraction in GDP of 1.6% by 2019, he now hopes that the recovery will come sooner than expected and that the decline will be slowed down, until the end of the year. at 1.2%.

However, the Fund expects the unemployment rate to be close to 10%. According to the latest data from Indec, unemployment increased by almost two points in a year and reached 9.1% of the labor force in the fourth quarter of 2018.

The IMF has revised its inflation expectations upwards, although it has calculated that in December it would reach 30.5% per annum. The estimate is lower than that of private consultants. The latest Central Bank Market Expectations Survey (MER), which is the month of March, showed that economists expect the CPI to score 35.1% a year at the end of the year. end of 2019, up 5 points from the February survey.

"In Argentina, growth projections have been revised upward and it is expected that higher nominal wages and upward inflation expectations will generate more persistent inflationary pressures. in 2019 than those projected in October 2018 ", date of publication of the last WEO, indicated the substance.

For the IMF, the average inflation of 2018 will be higher than that recorded between January and December and will be about 34.3%. In 2020, the multilateral agency expects a further 21% increase in prices.

Things happened

In its annual report, the IMF examines the performance of the global economy. Throughout the document, two countries appear badociated again and again, in the context of the same phenomenon: Argentina and Turkey. Recall that the peso and the lira were the most devalued currencies in 2018.

"A year ago, economic activity accelerated in almost every region of the world and projected global economic growth was 3.8% for 2018 and 2019," the fund said. "A year later, a lot has changed: trade tensions between the US and China have intensified, macroeconomic tensions in Argentina and Turkey, disruptions in the German auto sector, tightening credit policies in China and the financial hardening resulting from the normalization of monetary policy in the most advanced economies has significantly contributed to weaken global expansion, especially in the second half of 2018, "he added.

(Source: TN)